1. What is the Price Per Share Formula?

The Price Per Share formula calculates the value of each individual share by dividing the total equity by the number of outstanding shares. This is a fundamental calculation in finance and investing.

2. How Does the Calculator Work?

The calculator uses the Price Per Share equation:

Where:

• Total Equity — The total value of the company's equity (currency)
• Shares — The number of outstanding shares (number)

Explanation: This simple division gives the theoretical value of each share if the company's equity were distributed equally among all shares.

3. Importance of Price Per Share Calculation

Details: Price per share is crucial for investors to evaluate whether a stock is overvalued or undervalued, and for companies to determine share prices during fundraising.

4. Using the Calculator

Tips: Enter total equity in your preferred currency and the number of shares. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Is this the same as market price per share?
A: No, this is the book value per share. Market price is determined by supply and demand in the stock market.

Q2: What's included in Total Equity?
A: Total equity typically includes common stock, retained earnings, and additional paid-in capital.

Q3: How often should this calculation be done?
A: For public companies, this is calculated quarterly with financial statements. For private companies, it's typically done during valuation events.

Q4: What if there are different share classes?
A: The calculation becomes more complex with multiple share classes having different rights. This calculator assumes a single class of shares.

Q5: Does this account for dilution?
A: No, this is a simple calculation using outstanding shares. For fully diluted price per share, you would need to include potential shares from options, warrants, etc.